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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Syncrude who wrote (6898)	10/14/1999 2:52:00 PM
From: GVTucker	Respond to of 24939

More MEL 14 dry holes is way beyond my understanding. The main problem from what I have deciphered is that the decline rates in existing wells is a lot higher than most people figured a year ago. Current production is at a little more than 10,000 BOE/day. It wasn't too long ago that they thought the rate would be more like 12,000 BOE/day. They're still telling everyone that they'll be better than 13,000 BOE/day next year, but given this year's performance, everyone is in a prove it mode. At the lower level of production, cash flow looks to be around $50mm this year, barring any more disappointments. That would put the cash flow multiple at 3.8x. If they can reach 13,000 BOE/day level next year, cash flow would pe >$80mm, and the cash flow multiple below 3x.